|The City of Kasaan is operating with a balanced FY07 City budget where all utility related revenues and expenditures are reasonably listed. Projected water revenues are $13,000. which is comprised entirely of user fees. The projected water related expenses are $12,445. which corresponds to a budgeted net profit of $555. for the water utility. As of May 24, 2007, a comparison of budgeted vs. actual income and expenses reveals that utility expenditures are below budgeted amounts, however user fee income is $4956.61 below its budgeted projection. The disparity between actual and projected revenue represents an actual net loss of $3,859.09.
The governing body is fully aware that user fees do not produce sufficient income to cover operating expenses or repair and replacement (R and R) cost. It has been a general practice for the City to use other sources, such as the general fund, to subsidize utility operating expenses and savings are used for unexpected repairs. The community has adequate savings for unexpected repairs and equipment replacement.
The Mayor, who also serves as the Utility Manager gives a verbal status report to the Council at monthly meetings and provides adequate financial reports including a profit and loss statement, balance sheet, and budget vs. actual profit and loss.
The community has a City-owned bulk fuel facility which includes propane, gasoline and diesel storage tanks. The City receives fuel deliveries from Petro Marine Alaska in Thorne Bay, then retails this fuel to community members on a break even basis. The City has adequate funds available and purchases fuel as needed. The City usually maintains a one to three month fuel supply in the summer months and a slightly higher level of fuel reserve during the winter.
Electricity is provided through Alaska Power and Telephone and the City is current on its electric account.
No budget amendments have been made during the last fiscal year. As an informal city policy, amendments are only considered if actual revenue or expenditures for a particular line item deviates from budgeted projections by plus or minus $2,500.00. Even though this policy would normally be acceptable, the community was assessed as being deficient in reference to this sustainable indicator because given the criteria with this unofficial policy, water utility user fees have deviated from budgeted projections by over $5,000.00. There is little chance that the community will close this gap before the end of the fiscal year and the Council has not considered a budget amendment to address this shortfall.